PR Newswire | Sep 30, 2021 08:02AM EDT

09/30 07:00 CDT

To Afford Rent, Teachers and Nurses Are Living in Smaller, Older HomesManageable rent burdens mask affordability challenges for many workers who can afford only a small pool of available rentals- Rent burdens for many workers in fully in-person jobs, including teachers and nurses, have remained largely unchanged over the past five years, even as rent prices have grown significantly.- However, only a small share of rental homes in many large markets are priced low enough to allow teachers and nurses to keep rent burdens where they are now.- On average, these rental homes are smaller and older than typical rentals in each market. Older homes may increase the likelihood of living in unhealthy or unsafe conditions. SEATTLE, Sept. 30, 2021

SEATTLE, Sept. 30, 2021 /PRNewswire/ -- The Great Reshuffling has the potential to improve housing affordability for millions of Americans able to work remotely from a less expensive market. But for occupations that require in-person work - teachers and nurses, for example - affordability is becoming more of a challenge as rent growth sets new records. Many renters in those in-person jobs are battling for a small slice of the rental market comprising smaller, older homes, a new Zillow(r) analysis shows.

The analysis highlights the impact that more than a decade of underbuilding has had on renters as well as the need for communities to make it easier to build homes. New construction in the U.S. has fallen behind by millions of homes since the Great Recession, helping fuel record home value growth and increasing pressure on the rental market.

"Many renters have been able to keep costs low even as prices have grown over the past several years, but merely affording rent does not mean they are thriving," said Zillow economic data analyst Nicole Bachaud. "A deeper look shows a big slice of the market is out of reach for workers looking to maintain a comfortable rent burden. That often means renting an older home with less space but a smaller price tag, or doubling up with roommates or a partner."

While rent burdens - the share of income spent on rent - can appear low, especially when compared with recent growth in rent prices, renters often live with roommates or a partner, or target less desirable homes to keep housing costs manageable. The typical teacher spends about 22% of their income on rent, well below the widely accepted 30% rule for housing affordability. That's up only slightly from roughly 20% of income spent on rent five years ago, despite rent prices growing almost 24% over that period. To keep their rent costs this low, only a fraction of the rental market is available to teachers.

In Boston, for example, teachers on average only spend about 18.5% of their income on rent, down from about 20% in August 2016. But to do so, they must choose from only 6% of rentals in Boston that are priced low enough. Those homes are almost 300 square feet smaller and 33 years older than the typical Boston rental. While age does not always tell the whole story when it comes to quality, living in an older home increases the likelihood of living in unhealthy or unsafe conditions.

Even in Tampa, where teachers spend almost 28% of their income on rent, just under the 30% affordability threshold and much higher than the 17.2% they spent five years ago, teachers are limited in their rental options. Only 2.2% of the Tampa rental market is available for teachers who don't want to exceed that share of income spent on rent each month.

One way for communities to ease price pressures on renters is to make it easier to create new inventory, including relaxing zoning restrictions. Basic supply and demand is the primary driver of growing housing costs, so increasing the supply of affordable housing types can help meet demand. Zillow research has shown that even modest densification could exceed what is likely needed to meaningfully slow housing price growth over the long term.

"Boosting supply is the clearest path to improving affordability," Bachaud said. "Allowing for even small amounts of new density could have a big impact on prices."

Nurses face similar hurdles in finding an affordable rental. While nurses who rent live affordably in all large metros according to the 30% rule, they are renting homes at least 100 square feet smaller than the typical rental in each market. In San Diego, where nurses spend about 24.5% of their income on rent, only 8% of rentals are affordable at that rent burden.

Portland, Ore. is the most equitable rental market for nurses, with nearly two-thirds (63.4%) of the market available for nurses who spend 17.3% or less of their income on rent. The median rental available at that rent burden is 111 square feet smaller than the typical Portland rental, the second-smallest difference of any large market; affordable rentals for nurses in Washington, D.C., are 108 square feet smaller than a typical rental.

Share of Share of Typical Rental Rental Rent Median Median Market Median Median MarketMetro Area Price Rent Rent Available Rent Rent Available in the Paid Burden at Paid Burden at Current Metro Current Rent Burden Rent Burden

New York, NY $2,693 $936 18.5% 7.8% $1,036 15.8% 5.2%

Los Angeles-Long $2,630 $933 22.8% 8.2% $1,374 20.3% 12.6%Beach-Anaheim, CA

Chicago, IL $1,721 $675 19.0% 15.8% $747 16.4% 19.3%

Dallas-Fort Worth, $1,684 $807 18.0% 13.2% $1,118 17.6% 23.9%TX

Philadelphia, PA $1,705 $809 18.3% 7.3% $1,358 21.0% 13.0%

Houston, TX $1,519 $895 19.4% 29.5% $912 15.9% 31.3%

Washington, DC $2,125 $895 17.8% 18.3% $924 16.2% 26.3%

Miami-Fort $2,343 $841 23.8% 3.8% $909 21.7% 2.6%Lauderdale, FL

Atlanta, GA $1,827 $719 18.2% 0.9% $1,056 22.2% 3.0%

Boston, MA $2,532 $901 18.5% 6.3% $895 14.2% 2.7%

San Francisco, CA $3,092 $1,068 20.9% 13.3% $1,686 17.0% 19.5%

Detroit, MI $1,397 N/A N/A N/A $649 14.4% 24.3%

Riverside, CA $2,393 $927 27.1% 3.4% $1,133 19.1% 8.1%

Phoenix, AZ $1,806 $587 17.8% 2.8% $910 13.4% 6.8%

Seattle, WA $2,194 $971 21.7% 12.2% $1,187 20.7% 25.4%

Minneapolis-St. $1,590 $827 20.6% 28.6% $899 19.3% 44.0%Paul, MN

San Diego, CA $2,649 $1,224 24.5% 13.2% $1,494 20.8% 8.4%

St. Louis, MO $1,191 $541 12.0% 12.8% $734 12.8% 38.5%

Tampa, FL $1,876 $917 28.0% 2.2% $1,025 19.5% 8.7%

Baltimore, MD $1,775 $658 15.3% 13.5% $934 19.4% 22.2%

Denver, CO $1,903 $820 22.2% 32.6% $1,152 26.9% 50.7%

Pittsburgh, PA $1,218 $662 19.4% 17.7% $987 18.5% 20.6%

Portland, OR $1,773 N/A N/A N/A $1,107 17.3% 63.4%

Charlotte, NC $1,662 $590 16.0% 3.1% $778 17.2% 6.5%

Sacramento, CA $2,152 $768 21.3% #N/A $1,193 13.2% 17.4%

San Antonio, TX $1,374 $791 15.8% 30.4% $1,010 17.2% 40.0%

Orlando, FL $1,798 $1,349 38.1% 6.1% $838 18.2% 9.3%

Cincinnati, OH $1,356 $571 14.2% 13.1% $656 17.3% 14.7%

Cleveland, OH $1,261 $407 9.6% 15.3% $706 12.8% 11.6%

Kansas City, MO $1,262 $597 13.9% 23.9% $806 19.7% 45.4%

Las Vegas, NV $1,718 $699 16.7% 4.4% $981 19.6% 8.5%

Columbus, OH $1,359 $736 16.8% 9.5% $758 13.5% 14.9%

Indianapolis, IN $1,391 $970 25.1% 19.4% $634 13.8% 26.7%

San Jose, CA $3,126 $1,175 20.1% 37.4% $1,999 24.0% 53.4%

Austin, TX $1,754 $744 20.9% 17.1% $1,029 17.4% 25.7%

Virginia Beach, VA $1,527 $588 16.6% 5.9% $731 13.8% 5.1%

Nashville, TN $1,768 $685 17.7% 6.6% $792 19.3% 15.1%

Providence, RI $1,785 $642 16.6% 5.3% $1,088 23.6% 8.8%

Milwaukee, WI $1,192 $431 12.6% 14.8% $932 18.9% 14.9%

Jacksonville, FL $1,629 $670 20.8% 10.3% $874 17.0% 6.4%

Memphis, TN $1,535 $764 19.8% 7.5% N/A N/A N/A

Louisville-Jefferson $1,145 N/A N/A N/A $548 15.4% 8.2%County, KY

Hartford, CT $1,604 $579 12.9% 3.3% $982 25.2% 6.3%

Richmond, VA $1,429 $1,094 26.6% 12.8% $1,008 19.0% 31.6%

New Orleans, LA $1,319 $517 13.4% 4.6% $1,092 15.6% 27.4%

Buffalo, NY $1,190 $426 14.6% N/A N/A N/A N/A

Raleigh, NC $1,647 $561 14.6% 2.2% $816 20.9% 8.5%

Birmingham, AL $1,305 $427 25.4% 6.1% $527 16.8% 11.0%

Salt Lake City, UT $1,584 $484 12.9% 1.7% N/A N/A N/A

*Table ordered by market size

AboutZillow GroupZillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter.

As the most-visited real estate website in the United States, Zillow(r) and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and nearly seamless end-to-end service. Zillow Offers(r) buys and sells homes directly in dozens of markets across the country, allowing sellers control over their timeline. Zillow Home Loans(tm), our affiliate lender, provides our customers with an easy option to get pre-approved and secure financing for their next home purchase. Zillow recently launched Zillow Homes, Inc., a licensed brokerage entity, to streamline Zillow Offers transactions.

Zillow Group's brands, affiliates and subsidiaries include Zillow(r); Zillow Offers(r); Zillow Premier Agent(r); Zillow Home Loans(tm); Zillow Closing Services(tm); Zillow Homes, Inc.; Trulia(r); Out East(r); StreetEasy(r) and HotPads(r). Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).

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SOURCE Zillow